his information relates to Sunland Company for the year 2022. Retained earnings, January 1, 2022 $77,700 Advertising expense 2,080 Dividends 6,960 Rent expense 12,000 Service revenue 67,280 Utilities expense 2,900 Salaries and wages expense 34,800

Preparation of the income statement for Sunland Company ending December 31, 2022 is presented below:

Sunland Company

Income statement

Revenue

Service revenue $67,280

Total revenues $67,280 (A)

Less: Expenses

Advertising expense $2,080

Rent expense $12,000

Utilities expense 2,900

Salaries and wages expense 34,800

Total expenses $57,780 (B)

Net income $15,500 (A - B)

Simply we deduct the total expenses from the total revenues so that the net income could arrive